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Dairy markets steady on small volumes

Ray Mueller, Correspondent
Published 1:20 p.m. CT March 29, 2017

In a multiyear effort to reintroduce America to dairy, the Innovation Center for U.S. Dairy - in partnership with America's Dairy Farm Families and Importers - is launching "Undeniably DairyT," the first category campaign of its kind.(Photo: Getty Images/iStockphoto)

CHICAGO, IL. – After some high volume trading days earlier this month for dairy commodities in the spot market at the CME Group, the activity was relatively quiet and price movements were slight through the first three days of this week.

There were no price changes on Wednesday for Cheddar cheese or AA butter. They held at $1.4450 per pound for Cheddar blocks, $1.37 for Cheddar barrels as an offer to sell one carload was not covered, and at $2.10 per pound for butter during a market day with one carload sale, an uncovered offer to sell one carload, and an unfilled bid to buy one carload.

For the first three days of the week, total spot market sales were three carloads each for Cheddar blocks and AA butter, four of Cheddar barrels, and two of Grade A non-fat dry milk. The non-fat dry milk price lost .75 cent on Wednesday to close at 80.75 cents per pound as one carload was sold, a bid for two carloads was not filled, and an offer to sell five carloads was not covered.

Dairy futures steady

With the lack of price movement for dairy commodities, the Class III milk futures had no more than single digit per hundred changes in trading through early afternoon on Wednesday. The lowest prices were in the $15s per hundred for March through June of this year.

The Class III futures then rise to the upper half of the $16s per hundred for the 2nd half of 2017, slip to the lower half of the $16s for the first half of 2018, and then move back into the upper half of the $16s for the 2nd half of 2018 through February of 2019.

The national Class I fluid milk base price for April is $16.05 per hundred for milk at 3.5 percent butterfat. This is a decline of 85 cents from the March price.

A wide price spread continues in the futures market for dry whey. The prices on Wednesday stood from a high of 52 cents per pound for any contracts in the final days of March, dropped to 35.5 cents for April of 2018 amid the upper half of the 30s for all of 2018, and then jumped to 49.25 cents for January and February of 2019 although no contracts were being traded for those latter months.

Dairy export report

On Monday of this week, Cooperatives Working Together (CWT) reported the receipt of requests from a member or members (not identified) for financial assistance on a total of 21 contracts for the export of 2.381 million pounds of Cheddar and Monterey Jack cheese and 52,360 pounds of butter to buyers in Asia and Oceania. Deliveries are scheduled until June.

For the first quarter of 2017, the CWT program has been involved in the financially assisted export of 21.483 million pounds of American type cheeses and 1.427 million pounds of butter to buyers in 12 countries on four continents. On a milkfat basis, those manufactured products are the equivalent of 207.252 million pounds of milk.